Israel warned of a deteriorating security situation in the Sinai after gunmen killed about 15 Egyptian border guards and hijacked armoured vehicles to launch an attack across the Israeli border.

The assault on a security checkpoint in the Egyptian town of Rafah, where the borders of Egypt, Israel and Gaza converge, began at about 8pm on Sunday. According to a spokesman for the Israeli Defence Forces (IDF), eight armed men attacked while the Egyptian security guards were eating the traditional iftar meal that breaks the Ramadan fast. A further seven guards were injured.

The militants commandeered two armoured vehicles, which they drove towards the Israeli border. According to Arab media reports, one vehicle exploded on the Egyptian side of the border, the other broke through the security fence near the Kerem Shalom border crossing and was hit by Israeli air force planes.

Israeli government spokesman Ofir Gendelman said seven militants were killed, four on the Israeli side of the border and three in Egypt. He said Israeli soldiers were combing the area for other militants who might still be on the Israeli side of the border. The military instructed Israeli civilians to stay inside their homes.

Defence minister Ehud Barak said the attack "again raise[s] the need for determined Egyptian action to enforce security and prevent terror in the Sinai", and the country's security forces had "thwarted an attack that could have injured many".

Israel has become increasingly concerned about a security vacuum in the Sinai in the 18 months since the Egyptian revolution. There have been a number of attacks and attempted attacks on Israel from across the border. Israel says some militant groups in Gaza have joined forces with Islamists operating in Sinai.

In the past year, Israel has permitted the Egyptian government to station more troops in Sinai than is allowed under the 1979 peace treaty in the hope of beefing up security.

According to Egypt's state news agency, the attack was the responsibility of militants from Gaza who entered Egypt through the tunnels beneath the border.

Hamas, the Islamist organisation that rules Gaza, condemned the attack. It has tried to contain militant activity since the end of its war with Israel three-and-a-half years ago. "Hamas condemns this ugly crime which killed a number of Egyptian soldiers and extends its deep condolences to the families of the victims and to the leadership and the people of Egypt," it said.

Earlier on Sunday, a militant in Gaza was killed and another injured in an Israeli air strike on a motorcycle near the Egyptian border. The IDF said it had targeted a "global jihad-affiliated terrorist squad in the southern Gaza Strip" which was responsible for an attack on the Israel-Egypt border in June in which an Israeli civilian was killed. Another attack was being planned, the IDF said.